Axis Financial Results Points to Market Slowdown

Author: John Honovich, Published on Oct 17, 2008

Axis 3rd quarter results demonstrate signs of a market slowdown, most strongly in Europe but with leading indicators globally.

  • Worldwide video growth decreased from 37% in Q2 to 32% in Q3.
  • Europe video growth plummeted from 37% to 11%. Axis explained that, "A number of European markets have been characterized by a degree of caution and have displayed a slower growth rate for network video during the quarter."
  • US video growth slowed from 36% to 32%.
  • Axis admitted that the transition from analog to IP has been slowed by the financial crisis
  • Axis admitted that projects are being delayed.

As Axis states in their outlook for the remainder of 2008:

"The current financial turmoil has meant in some cases that decisions on security installations have been deferred, which in turn has affected the pace of the technology shift from analog to digital technology."

As the chart below demonstrates, Axis video growth (red line) has been slowing significantly since the middle of 2007 (coincidently the peak of the housing bubble?).
axis ip video growth slowing

What is the cause?
I offer two hypothesis to evaluate:
  1. The economy is pulling down the IP video market resulting in lower growth in 2009.
  2. Axis' competitive differentiation is dimishing causing its dominance in the IP camera market to decrease.
On the positive side for Axis, their Operating Margins were unchanged from Q2. Interestingly though it looks like they slashed Sales and Marketing costs by 10% to achieve this. [Note: if Axis thought that the market was going to recover quickly, it is unlikely that they would have cut sales and marketing costs so significantly]

What will happen next?
The title of their presentation is "Continued Profitable Growth". While this is definitely true, it is misleading. Growth deceleration will continue and should quicken in Q4, especially in the US where the impacts of the credit crunch are likely to start taking effect.

What's interesting now is: how will they and others respond?

Most Recent Industry Reports

Robot Vandalism on Dec 11, 2017
Vandalism of security systems is a common concern. It is so common that camera vandalism statistics show that designers routinely sacrifice camera...
Access Controller Software Guide on Dec 11, 2017
Properly configuring access controllers software is key to a professional access system. These devices have fundamental settings that must be...
2018 Video Surveillance Cameras Overview on Dec 11, 2017
This report concisely explains the developments for surveillance cameras offered in 2017 and the state of offerings going into 2018, including...
Imperial Capital Security Investor Conference Review on Dec 08, 2017
Investment bank Imperial Capital holds an annual Security Investor Conference where 60+ companies present, including this year: IPVM bought a...
Integrator GPS Vehicle Tracking Statistics and Success Examined on Dec 08, 2017
GPS vehicle tracking is a growing but somewhat controversial topic. On the plus side, tracking may increases productivity by providing greater...
Hikvision NA Biggest Sale of 2017 on Dec 07, 2017
Hikvision North America has been relatively disciplined the past 5 months, reducing the number of sales and the breadth of what is on sale. No...
Security Integrator IT Expertise Statistics on Dec 07, 2017
20 years ago, putting physical security systems on IP networks was just emerging. Today, almost every system is networked in some way, IP cameras...
Lighthouse Deep Learning Camera Tested on Dec 07, 2017
A Silicon Valley startup, Lighthouse, with a Stanford PhD CTO, has released a deep learning AI camera with 3D sensors for just $300. The company...
Access Control Course Winter 2018 on Dec 07, 2017
Learn more below about the Winter 2018 IPVM Access Control Course. Register here. IPVM offers the most comprehensive access control course in...
Broken Hikvision App Exposes Hypocrisy on Dec 06, 2017
While Hikvision talks about a commitment to cybersecurity, their broken app and their insecure 'solution' exposes not only their engineering...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact